Collecting and investing

The appreciation of art over time describes how the value of a work you hold grows. Art can make money, but always with risk, and over a longer run rather than overnight.

An art-secured loan is a credit facility in which an art collection serves as collateral. Abroad it is a common service; here it is still the exception — and an opportunity into which the market has yet to grow.

The criteria of good art are four guides by which to recognise a work with a chance of standing up over time and on the market (investment quality): innovation, an informed grasp of history, relevance, and the artist's fidelity to their purpose.

Emotional value versus investment describes how art is bought with the heart and with the head. Emotion comes first, but a good choice can be backed up with figures too.

Fractional ownership means that several people share a single artwork, each owning a share in it. It is a way into collecting without millions in the bank, and one of the fastest-growing trends on the art market.

Generations of collectors describes how differently people buy according to age and taste. Every generation is looking for something else on the art market, from status to new forms of ownership.

Inheritance tax is the tax an heir pays on the value of inherited property, an art collection included. Abroad it tends to be high, and so it significantly affects when and how collections appear on the market.

The investment horizon is how long you hold a work before it makes sense to sell it. Art is not a quick trade, so it is counted in years rather than months.

Liquidity — how easily, how quickly and for how much you can sell a work when you need to — is an often overlooked yet crucial risk of collecting. Art is not a share you can turn into cash in a second.

Portfolio allocation to art is about what share of your assets it makes sense to hold in art. Art figures here not as speculation but as a way of spreading value alongside shares or property.

Qualified investors' funds are investment funds focused on art. They are a route for anyone who wants to enter the art market but does not want to handle the selection and management of individual works themselves.

Refining your taste is the gradual sharpening of the ability to recognise quality and depth in an artwork. It develops with time and experience, much as it does with wine.

A single-owner collection is an auction devoted to the collection of one respected collector. The shared origin and story pull the prices of all the lots upwards, because the buyer also acquires a piece of curatorial taste.

The 3D rule is a collector's shorthand for the three life situations that most often bring great collections to market. It explains why a work that was out of sight for decades appears just now.

An artist as a brand is one who, alongside the works themselves, builds their recognisability, their name and their presence on the market. A strong brand sustains demand, but it also places an obligation on the artist.

Women's share of the art market is growing on both sides — as collectors and as valued artists. The market is also systematically rediscovering women artists who were previously left in the shadows.